July 9, 2014
Good metrics and good use of metrics can increase effectiveness and efficiency in most businesses. Metrics are outcomes and outputs we measure to track and manage processes, operations, or performance in and across business units. How well are your organization and its units using metrics to make positive differences? Are you getting the most from your metrics management?
With today’s technology, there is very little that cannot be measured. For some, the ease of measurement results in an abundance of data that can be mined to improve performance. However, this ease of measurement can also result in so many measures that the most important metrics do not get the attention they should. To stay on top of your metrics and their use, regardless of your function or level in the organization, consider these questions.
1. Do we know our most important metrics? Not all metrics are equal. Every metric should be clearly tied to a goal, an objective, or strategy. Some, more than others, are indicative of strengths and weaknesses, potential problems, and perhaps opportunities. The better you understand your key metrics, the better you understand how your business is functioning.
2. Are we measuring what we need to measure? Measuring CD sales in an MP3 world does not make sense. Stay abreast of changes in your environment, with your competitors, with your customers, with technology. Reevaluate your metrics on a schedule that makes sense for your business. You should be able to answer, “Why are we measuring this?” or ask, “Why are we not measuring this?”
3. Do we know precisely how the values of our metrics are determined? Every metric needs to be operationally defined and easy to understand. You need to know exactly how the quantitative or qualitative information in a metric got there, the source, the procedure, the form. For example, inadvertently changing a form or data entry criterion may unknowingly change a metric. Some metrics may be too complex or not worth the time consumed to produce.
4. Are we measuring what we think we are measuring? Even well-designed metrics may be subject to manipulation out of self-interest. For example, consider recent news reports of the manipulation of waiting times at some VA hospitals.
5. Are we evaluating key metrics in a timely manner? You may have a dashboard that displays key indicators daily or in real time. Or metrics may be the focus of weekly or monthly meetings. Timeliness will be a function of the type of metric, its criticality, and level in the organization. The key is to know if you are reviewing key metrics in sufficient time that corrective measures can be effectively taken if need be.
6. Do our employees participate in metrics management? Buy-in can elevate a metrics program. People in the trenches know, see, and have information that may make measurement better, more reliable, and more useful. Likewise, sharing metrics may help build a stronger workforce.
The better your metrics and metrics management, the better your decision-making and greater the probability for business success.
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